June 16, 2014

Samsung's Galaxy S5 is Confirmed a Dud & May Hurt Financials

Last week it was reported by NWA online that Samsung's mobile-phone business, which accounted for 76 percent of operating income in the first quarter, posted the lowest sales in five quarters as Chinese producers gain in emerging markets with cheaper, feature-packed devices. The chances of it turning around this quarter may be tough if a new report out of Korea pans out.

According to Korea's UDN, Samsung's supply chain sources are stating that Samsung's goal was to ship 21 million Galaxy S5 units this quarter and that they'll likely ship closer to 15 million which is a 25% target miss. This would be a huge miss. Sales for the Galaxy S4 are down a million units as well.

Despite the super hype from the Android community in the US that sales for the Galaxy S5 were fantastic, Patently Apple continued to be the lone site reporting the very opposite. Our three reports covering this topic were as follows:

While the report is pointing to the market waiting for Apple's iPhone 6, I'm not quite sure that's the full reasoning for the drop in Galaxy S5 demand. Many fans were expecting the Galaxy S5's display to take a giant leap forward in resolution and that didn't pan out. Then they had major camera problems.

Then later in May news of their fingerprint scanner failures and e-commerce security risks were highlighted by Senator Al Franken. And finally, Samsung's early talk of the Galaxy F-Series phone became the S5 Prime model rumored in May and the specs were going to be greater in order to compete against LG's latest smartphone the G3.

In the end, while the market may be waiting for the iPhone 6, I think that the Android community is realistically waiting for Samsung to stop rushing smartphones and tablets to market with flaws and focus on delivering stable and complete products.

If the rumor pans out, then the side effect will be Samsung bungling another quarter by missing smartphone targets – big time.

About Making Comments on our Site: Patently Apple reserves the right to post, dismiss or edit any comments. Comments are reviewed daily from 4am to 7pm PST and sporadically over the weekend. Source UDN report dated June 6, 2014 via MacDailyNews.